How to Calculate Your High-3 for FERS Retirement

To calculate your high-3 for FERS retirement, find the 36 consecutive months of federal service in which your basic pay averaged highest, weight each pay rate by the number of days it was in effect using the Office of Personnel Management’s 30-day month convention, sum the weighted amounts, and divide by three. The result is the average salary figure OPM plugs into your annuity formula. Every dollar of error compounds across every year you collect a pension, so the mechanics below are worth working through carefully.

What Counts as Basic Pay

Only “basic pay” as federal law defines it goes into the high-3, and that definition is narrower than most employees expect. Your General Schedule base salary and locality pay adjustment both count. The statute also includes a short list of extras: availability pay for criminal investigators (LEAP), certain law enforcement premium pay, customs officer overtime up to 50% of the statutory cap, physicians comparability allowances, and border patrol supplemental pay for scheduled overtime within a regular tour of duty.¹

The exclusion list is longer. Basic pay does not include overtime, bonuses, recruitment or relocation incentives, retention incentives, performance awards, military pay, uniform allowances, or lump-sum leave payments.¹ Holiday premium pay, night differential, Sunday premium pay, and hazardous duty pay are also excluded. Cost-of-living allowances for employees stationed outside the contiguous United States (Alaska, Hawaii, overseas posts) are allowances, not basic pay. If your gross paycheck has been inflated by overtime or bonuses, your pension will be based on a lower number than your take-home suggests.

Federal Firefighters

Federal firefighters have a wrinkle. Under the Firefighter Pay Reform Act, the straight-time portion of overtime hours within a firefighter’s regular tour counts as basic pay for retirement. The extra half-rate overtime premium on those same hours does not.² Both amounts show up on the same earnings statement, which is why the distinction gets missed.

VA Physicians and Dentists

Physicians, podiatrists, optometrists, and dentists in the Veterans Health Administration receive base pay, market pay, and performance pay. Base pay and market pay both count toward retirement. Performance pay does not.³ Market pay can be substantial, so these employees often see a much higher high-3 than their GS-equivalent peers.

Pull Every SF-50 in the Window

Every official personnel action generates a Standard Form 50. Promotions, within-grade increases, general pay adjustments, reassignments, and changes in duty station each trigger a new one. Each form records the effective date and the resulting pay rate.⁴ Those two fields are the raw inputs for your calculation.

You need a complete, chronological set of SF-50s covering at least the last several years of your career, longer if you think your peak earning period was earlier. A single missing form can distort the result, especially if it documented a promotion or a locality change. Your agency HR office and your electronic Official Personnel Folder (eOPF) should both have them on file. Lay them out in date order and verify the dates flow without gaps: where one form’s pay rate ends, the next should begin.

Finding Your Highest 36 Consecutive Months

The statute defines average pay as the largest annual rate you can produce by averaging your basic pay rates over any three consecutive years of service, with each rate weighted by the time it was in effect.⁵ For most employees this window falls at the end of the career because that’s when pay peaks. If you took a voluntary downgrade, moved to a lower-locality area, or shifted to part-time near the end, OPM will look back for an earlier period that produces a higher average.⁶

The three years must be consecutive in terms of creditable service, not calendar time. If you separated and later returned to federal service, your pre-break and post-break service can be strung together to form the 36-month window, as long as the service itself is continuous once the break is removed. Interrupted careers sometimes produce a best window that bridges a gap.

If your highest-earning stretch includes leave-without-pay time, up to six months of LWOP in a calendar year still counts in the average, using the basic pay rate in effect during the nonpay period.⁷ LWOP beyond six months in one calendar year can shift the window or reduce the time credited at that rate.

Use OPM’s 30-Day Month, Not the Calendar

This is the detail that trips people up. OPM does not use a 365-day year for retirement computation. Every month has exactly 30 days and every year has exactly 360 days. The 31st of any month gets no credit. February is treated as if it had 30 days, so the 28th counts as three days (the 29th as two in a leap year).⁸

So your three-year window is 1,080 days, not 1,095. When you count days at each pay rate, use OPM’s 30-day months. A pay rate effective March 15 that changed September 15 was in effect for exactly six months, or 180 days, regardless of whether those months had 28, 30, or 31 calendar days. Get this convention wrong and your final average can move by hundreds of dollars.

Running the Numbers

Once you’ve identified the window and pulled every SF-50 that falls inside it, the math works like this:

Break the 36 months into segments based on when your basic pay changed. For each segment, note the annual pay rate and the number of OPM-calendar days that rate was in effect.
Multiply each segment’s annual pay rate by its days divided by 360. That’s the weighted pay for the segment.
Add every segment’s weighted pay together. This total is your basic pay across the whole 36-month period.
Divide the total by three. That figure is your high-3 average salary.

A concrete example. Your highest 36-month window runs January 2024 through December 2026, with two pay changes:

January 2024 through August 2024 (240 days) at $90,000: $90,000 × (240 ÷ 360) = $60,000
September 2024 through December 2025 (480 days) at $93,000: $93,000 × (480 ÷ 360) = $124,000
January 2026 through December 2026 (360 days) at $96,000: $96,000 × (360 ÷ 360) = $96,000

Total basic pay: $60,000 + $124,000 + $96,000 = $280,000. Divide by three, and your high-3 average salary is $93,333. Notice how the eight months at $90,000 pulls the average down even though your ending salary is $96,000.⁸ The longer you sit at the higher rate before retiring, the higher your average climbs.

How the High-3 Turns Into an Annuity

Your high-3 is one of three inputs in the FERS pension formula. The other two are your years of creditable service and a percentage multiplier tied to your age at retirement:

1% multiplier if you retire before age 62, or at 62 or older with fewer than 20 years of service.
1.1% multiplier if you retire at age 62 or later with at least 20 years of service.

The formula: high-3 × multiplier × years of service = annual annuity.⁶ Using the $93,333 from the example, an employee retiring at 62 with 25 years of service would receive $93,333 × 0.011 × 25 = $25,667 per year, or about $2,139 per month. That same employee retiring at 60 with the same service uses the 1% factor: $93,333 × 0.01 × 25 = $23,333 per year. The difference over a 25-year career is about $2,333 annually for life.

Law enforcement officers, firefighters, air traffic controllers, Capitol Police, Supreme Court Police, and nuclear materials couriers use a more generous formula: their first 20 years of service are multiplied at 1.7% of the high-3, and any service beyond 20 uses the standard 1%.⁶

Situations That Change the Picture

Part-Time Service

If you worked part-time during any portion of your high-3 window, OPM still uses the full-time pay rate you would have earned on a full-time schedule when computing the average. The part-time reduction happens separately: after the annuity is calculated using the full-time high-3, OPM multiplies the result by a proration factor reflecting the ratio of part-time to full-time hours across your career.⁹ Switching to part-time near the end of your career won’t tank the high-3, but it will reduce the final annuity through the proration factor.

Unused Sick Leave

Unused sick leave does not increase your high-3. It adds to total creditable service in the annuity formula, effectively giving you extra months or years in the multiplier calculation. The high-3 itself is computed only from basic pay rates. Sick leave credit also cannot be used to meet minimum service requirements for retirement eligibility.¹⁰

Military Service Buy-Back

If you served in the military before your civilian career and made a deposit to receive credit for that time, the military service adds to your total years of creditable service. Your military pay rates are not used in the high-3 calculation, which looks only at civilian basic pay earned during federal civilian service.⁶ For employees with fewer than three years of civilian service, OPM averages basic pay across all creditable civilian periods rather than requiring a full 36-month window.

1
Office of the Law Revision Counsel. 5 USC 8331 – Definitions
2
OPM.gov. BAL 01-107 Firefighter Pay Reform Act PL 105-277
3
Office of the Law Revision Counsel. 38 USC 7431 – Pay
4
Government Publishing Office. Guide to Understanding Your Notification of Personnel Action Form SF-50
5
Office of the Law Revision Counsel. 5 USC 8401 – Definitions
6
U.S. Office of Personnel Management. Computation
7
U.S. Office of Personnel Management. Effect of Extended Leave Without Pay LWOP or Other Nonpay Status on Federal Benefits and Programs
8
U.S. Office of Personnel Management. CSRS and FERS Handbook Chapter 50
9
U.S. Office of Personnel Management. CSRS and FERS Handbook Chapter 55
10
U.S. Office of Personnel Management. Computation